Stayin’ Alive

So will it help, or not?

The global markets seem to think that the Paulson plan will be a good thing. Since the idea was first proposed, global financial stocks have appreciated by about 900 billion dollars. While that’s still a long way from the 3 trillion or so that has been lost since last summer, it’s still a pretty good piece of change.

So on first blush,  the plan is a success. It’s big enough, and systematic enough, to make a real difference. But can it help us take the next step to recovery?

That depends on what happens in the real economy. Up until now there has been a disconnect: markets have been predicting a nasty downturn while the global economy keeps on chugging, even if at a slower pace. This plan helps the banks facilitate this continued growth.

The plan isn’t perfect: some bankers will remain in business who really shouldn’t. But “payback” is not a sound financial policy. And an old western saying goes that before you ride out for revenge, be sure to dig two graves. Paulson’s outline should keep both the banks and the economy alive.


Douglas R. Tengdin, CFA
Chief Investment Officer
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By | 2014-09-03T21:16:33+00:00 September 29th, 2008|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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